According to a CNN business report, PepsiCo (NASDAQ:PEP) won’t sue four farmers in India for allegedly growing a variety of potatoes that were exclusive to the company.
But only if they agree to a settlement clause.
Grown exclusively for its Lays chips, Pepsi has made it illegal for anyone else to grow the potatoes in question.
PepsiCo
Pepsi’s Indian subsidiary first filed the lawsuits against the farmers a few weeks ago. However, the company has said it will drop the case if the farmers join thousands of others in the “company’s authorized cultivation program.”
A PepsiCo spokesperson told CNN:
“We told them, why don’t you join our program and we will provide seeds […] Either join us or grow other potatoes. That way, we are willing to let go of the case.”
The farmers are now taking time to consider the offer, and the next court hearing is due on June 12th.
If the farmers reject the offer, then Pepsi will seek damages of 10 million rupees ($143,000) from each farmer. While the number of potatoes grown only spans a few acres, Pepsi has maintained that it faced no choice but to file the lawsuit. The spokesperson furthered:
“The company was compelled to take the judicial recourse as a last resort to safeguard the larger interest of thousands of farmers that are engaged with its collaborative potato farming program.”
If the farmers accept the settlement offer, the company will not look for any damages or compensation in lieu.
India vs Global Conglomerates
The issue has raised major concern for the wellbeing of small farmers in India. On this matter, several bodies such as the Farmers’ Association called on the Indian government to intervene and take action against PepsiCo.
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The activists in question wrote a letter to the Indian government saying that the farmers’ right to grow and sell registered crops are protected under India’s agricultural laws.
The group also claims Pepsi sent undercover detectives posed as potential buyers to the accused farmers where they secretly recorded video and took samples of the potatoes.
Pepsi has not responded to those allegations. PEP shares have definitely taken a hit this week. Plummeting to $125.54 yesterday, shares have rebounded somewhat today and are selling for $126.43, up o.24% at the time of writing.
What are your thoughts on this case? Do you think Pepsi is throwing its weight around?
Featured Image: DepositPhotos © SashaKhalabuzar
